Companies in specialty business sectors often find it desirable to contract with other companies in their specialty business sector to offer a more complete service to the customers. Additionally, companies often find it advantageous to provide numerous ways for their customers to purchase their goods and services. Such specialty business sectors include, for example, any frequent use industry in which customers will realize a service advantage through the integration of alternate means of payment (e.g., an open financial payment system) within the industry and in which the industry will advantageously develop customer loyalty through the integration. The amusement park or theme park industry would benefit from such integration by allowing various parks (e.g., traditional theme parks, water parks, zoos) in close proximity to one another to negotiate agreements with each other to minimize the conventional inconvenience of customers wishing to visit multiple parks in a single day.
Another industry in which companies have benefited to some extent already by contracting with each other to reduce customer inconvenience is the transit industry. Major cities typically have a network or system of interconnected transportation routes or lines that are run by different companies. It is generally advantageous for a first company to have the flexibility to accept a ticket or fare from a second company. There are generally cross-agency contracts that define the allocation of inter-agency transfers. In traditional payment settlement, all funds collected are allocated back to a merchant less processor, interchange and issuer fees and adjustments. With respect regard to inter-agency transfers, on a subway for example, many transit operators currently process the transfers every few months in a manual fashion by weighing transfer tickets.
The terms “clear” and “clearing” are widely used in the financial services community to represent the activities performed at the end of each agreed period (usually a day or a fraction of day) by a central organization to determine the funds due to each participant in a payment system. The terms “settle” and “settlement” are used to describe the processes involved in sending payments, at the end of the period, to the individual participants as a result of the clearing process.
Clearing and settling the funds associated with daily transit transactions, especially inter-agency transactions, can be difficult and time-consuming. Thus, there is a need for a more efficient and cost-effective mechanism for clearing and settling funds among a number of participants in specialty business sectors.
There is also a need for additional, more convenient ways for customers in specialty business sectors to purchase goods and services that may be fully integrated within the business sector. In particular, there is a need for a clearing and settlement system that facilitates the integration of a “closed” special purpose industry sector within an open financial payment system.